On vocabulary.com, the word "circumstance" is defined as "the set of facts or circumstances that surround a situation or event". If so, can we say that the word "circumstance" means "circumstance of a situation"?
Yes it would be correct to use circumstance in that way, however the plural is usually used to indicate multiple causes or influences to a situation.
Financial aid is given to students depending on their circumstances.
The circumstances surrounding the murder are unclear and still being investigated.
My current circumstance is untenable and I will have to move.
The word circumstance can apply to a situation or a person. Really it only means something similar to "status" or "specific information" and not to the type of information. It is also not restricted to meaning a situation or occurrence and can be quite broadly applied.
"Circum" usually refers to an all emcompasing factor, literally "around" or in simple terms everything involved with, related to or co existing in the same space as a particular thing.
"Stance" usually refers to some sort of position or she adherence to a theory or principle. The "story", for want of a better word.
Stick the two together and you have "X's circumstance" meaning "the story of everything as it relates to x".
X can be a person, a planet, an ideal, a situation or an object. It is a term that can be applied rather broadly as it only really means a description or more accurately the factors that make up that description.